British Airways

British Airways overview

Full service global airline, offering year-round low fares

Flag carrier airline of the United Kingdom

Founded in 1924 as Imperial Airways, and operated

under that name until 1935

1939, the airline was nationalized to form the British

Overseas Airways Corporation (BOAC)

1972, BOAC and BEA were combined under the British

Airways Board

Mission

“The World's Favourite Airline”

provide the full service experience and achieve the target in both, in-flight and on the ground.

Vision

Accreditation for Carbon Offsetting Schemeoffer carbon offsettingthe first airline to win Government approval launch of the Department for Energy and Climate Change new Carbon Offsetting Quality Assurance Scheme

Industry united position on climate changereduce climate change emissions in aviation with a cap on net emissions by 2020 and a 50% cut by 2050It will guarantee environmental targets are met, and minimize costs to passengers.

Goals

EnvironmentReduce carbon emissions, waste, noise and improve local air quality.

CommunitySupport international communities, conservation projects and charities in the countries we fly to.

MarketplaceEncourage our customers and suppliers to act responsibly.

WorkplaceProvide a great place to work and encourage everyone at British Airways to embrace One Destination.

Internal and external capabilities

• Internal Capabilities• Aircraft fleet and destinations• fleet of 238 aircrafts• Access to more than 300 destinations• Sole access to Heathrow terminal 5

• Variety of Training facilities• Cabin crews are trained 1200 hours• Flight simulators – to Cabin Crews and Pilots• Computer Base Learning, Library facilities, Audio and Video based learning – designed to management staffs

Internal and external capabilities...cont

• Premium Services

• Quality services to customers at every touch

• Listen to customers feedbacks

• Corporate social responsibility

• Climate Change Programme,

• Reducing waste by 50%

Internal and external capabilities...cont

External capabilities• Close relationship with customers• Attend customers complain and feedbacks

• Alliances with other airlines• T o extend greater services, eg. One World,

American Airline, City Flyers…etc• Openskies Alliance

Internal and external capabilities...cont

• Corporate social responsibility

• Community learning centre at Heathrow,

London

• Partner with UNICEF, promote “ change for

good”

• Donate ₤1.3 million in 2010 from BA and

staffs.

• Raise USD $30 million from passengers

( 10 years)

SWOT analysis

• Strengths

• Strong brand image

• Opensky agreement

• International operations

• Sole access to Heathrow terminal

5

• Skilled staffs

• Expansion of Aircraft fleet

• Economies of scale by using• Spare space of passenger

aircraft for cargo services

SWOT analysis

• Official Airline for 2012 Olympic and

Paralympics games.. Deal of ₤40 million

• This create opportunities for BA to

impress their customers with excellent

services

SWOT analysis... cont

• Weakness

• Cost of management

• Decline profitability

• ₤358m loss in 2009 (After tax)

• ₤425m loss in 2010 (After tax)

• Labour strikes

• Powerful Employee Union

• Christmas strikes in 2009

SWOT analysis... cont

• Opportunities• Emergence of new

markets• Asia pacific

SWOT analysis... cont

• Threats• Raising fuel prices• Tight competition from low cost airlines• Changes in the consumers behaviour• Unstable political issues and global economic crisis

British Airways- market position, by using porter’s Five forces

Force StrengthCompetitive rivalry

• BA caters for both long and short haul flights•there is little differentiation between BA and its competitors in term of pricing and offer• The short haul market is more fragmented with many small players

HIGH

British Airways- market position, by using porter’s Five forces… cont

Force Strength•Power of suppliers• Two aircraft manufacturers • BA restricted by sole suppliers of fuel to the airport

HIGH

• Power of buyer• Long Haul destinations- customer has no other choice• Availability of flights and seats are limited •However , prices are changes according to demand- festival times

MEDIUM

British Airways- market position, by using porter’s Five forces… cont

Force StrengthThreats of new entrance• competitive environment• High regulatory requirement• high cost requirement

HIGH

Threat of substitutes• There are few direct closed substitutes• Short haul flights : Euro star or a ferry•Long haul flights : No notable substitutes

LOW

Five Strategic Goals

Be the airline of choice for longhaul premium customers.

. key to our profitability.

. deep understanding of what is required to be

their airline of choice to drive our design choices on product, network and service.

Deliver an outstanding service for customers at every touch point.

. to build on this through a revolution in the way

we lead, train and reward, so that all our

customers, on all routes and classes, enjoy a

premium experience. . will invest both in improvements

targeted, such as service style training, and in those

benefiting all customers, such as Terminal 5.

 

Grow our presence in key global cities.

. to provide the best global connectivity for

our customers.

. will build our presence in the top tier global

cities, either directly or through our expanding

network of airline partnerships.

Build on our leading position in London

. To support this, we will look to influence

government policy decisions, and work with the airport owners on the

continued development of the infrastructure.

Meet our customers’ needs and improve margins through new revenue streams

. will explore how we can develop new products and services which exploit our assets and capabilities, and meet the needs of our core customers and

enhance loyalty.

Competitive Advantage

modern technology – Self Service Check-in (SSCI) .

. Using IBM's kiosks .

. Lower cost - estimated savings at $3.50 per passenger most advanced freight processing facilities service

. BA used one of the largest computers outside

the defence industry. . extract data from anywhere in the BA

network in two seconds.

Strategies that have been implementing?

Setting the priority (not opening too many fronts） Be more sensitive to Human aspect and job cuts. It become operations oriented, with low emphasis

laid on employees moral Bob should have involved people in the process.

Change accomplished through people is far more effective than change forced upon them

British Airways plans to reduce waste on future flights

By 2014 British Airways will be reducing10% of its waste on future flights

Recommendation

Community: Raise £2 million each year for our partner charities. Continue to offer a learning experience to schools in the

Heathrow area at the British Airways Community Learning Centre.

Support a whole range of community and conservation projects around the world

Workplace: Make it easier for BA people to volunteer time to charities and

community activities. Create more energy efficient workplaces for our teams

worldwide. Ensure that every member of staff has the opportunity to get

involved with One Destination

  

Recommendation… Cont

Environment: Reduce our average noise per aircraft by 15% by

2015*. Become 25% more carbon-efficient by 2025 (83 g

CO2 / pkm reduced from 111 g CO2 / pkm). Recycle 50% of all our waste. Reduce our net CO2 emissions by 50% by 2050.

Marketplace: Make it easier for customers to carbon offset their

journeys. Our key suppliers will be audited independently for

their ethical practices by 2012.

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